The US Dollar is the most common currency that is commonly quoted in trade across the globe. It is one of the most popular currencies in the world. However, there are several other currencies that are actually not affected by the US Dollar movements in the forex market. These currencies may not be as popular as the US Dollar; nevertheless, they hold their own importance and are backed by several factors in their own countries that make them hold their ground strongly, in case of Dollar fluctuations.

The Euro:

European Union decided to have its own currency in 1999 and introduced it in the forms of coins and notes by the year 2002. Since then, the Euro has been one of the strongest contenders against the US Dollar. The EU consists of Austria, Belgium, Greece, Germany, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Socialist countries, which are also the largest countries of EU, hold the reigns of government budget deficits. The ECB or the European Central Bank is the lead bank that decides the monetary policies and aims to keep a check on inflation rather than keeping a check on economic contraction. The ECB has kept steady interest rates in past when there had been an economic slow down. Thus interest rates or adjustments in Euro exchange rates are less frequent.

The Japanese Yen:

Japan is a net importer of goods. However, the US and Europe are its major customer for its machinery and other production. Japan especially needs crude oil to keep its economic machinery running like clockwork. Bank of Japan faced one of the major deflationary crises in 1990s when it was compelled to switch to zero interest policy. At this time, Yen experienced the carry trade – when an entity buys a currency at zero interest rate and parks it in another account with high interest rates. In 1990s, the US treasury bonds and German bunds witnessed many such transactions. This means that the Japanese Yen shall always trade lower against the Euro and US Dollar which gives Yen/Euro trade as a viable pair. The only contention offered to this trade is the Chinese Yuan. China is one of the biggest competitors of Japan. Since china also artificially floats its currency, it may weaken the Yen’s value eventually.

The British Pound:

Britain has oil production in North Sea which can influence its economy. This means that Britain has energy reserves and thus, whenever the oil prices have gone high in past, so has the British pound. However, Britain has been experiencing a net increase in its demand for natural gas which has made it as a net importer of natural gas. This means that if there are any outrageous price spikes in the commodity, it would lead Britain to economic exposure. If oil prices start to head north rapidly, Bank of England may need to keep inflation in check and consumer spending may be severely affected. The British pound is also susceptible to strengthening of European currency. Thus, trading Euro with Pound can be quite a liquid trading relationship.

The Canadian Dollar

It is also referred to as "the Loonie" as it has the bird, huard, on its coin. Loony is the French for huard. Bank of Canada is country’s central bank that dictated the monetary policies for the nation. It holds eight meetings in a year to decide upon the interest rates policy. Canada is also world’s second largest reserve for crude oil with more than 175 billion barrels of reserves. The US is its main customer and if there is an increase in the oil prices, they would further strengthen the Canadian Dollar.

The Swiss Franc

It is commonly known as the "the Swissy". It is one currency that is capable of outperforming the Euro if there is dissention between the EU members. It is backed by gold thus is considered one of the safest currencies. Inflation, economic contraction, political stability and excessive economic growth are some of the factors that affect performance of the Swissy.

Retail Sales rebound on US consumer strength.U.S. Dollar Trading (USD) the much anticipated May Retail Sales didn't disappoint coming in much stronger than anticipated at 1.0% vs. 0.5%. Combined with upward revisions in March and April the numbers paint a resilient picture of the US consumer. The Government stimulus package released in late April has filtered through leaving the US Federal Reserve the possibility of a rate hike later in the year. Driving up inflation fears, US import prices for May rose 2.3% on soaring energy costs. Weighing on the Dollar though was the continued weakness in US initial Jobless claims coming in at 384K up 25K from last week. In the US share markets, the NASDAQ was up 10 points (0.4%) and the Dow Jones was up 57 points (0.57%). Crude Oil closed up $0.36 ending the New York session at $136.74 per barrel. Looking ahead we have the May CPI expected to quicken to 0.5% from Aprils 0.2%. June Michigan Consumer Confidence is expected to fall further to 50.5 from 51.1 in May.The Euro (EUR) continued in a downtrend bowing to USD strength but still performing well against other currencies. Solid April Industrial Production of 0.9% and strong reported sovereign bids helped to rebound off lows. Overall the EUR/USD traded with a low of 1.5379 and a high of 1.5566 before closing the day at 1.5420 in the New York session. Looking ahead, German CPI for May forecasted at 0.6%.

The Japanese Yen (JPY) the USD/JPY traded through 108 for first time since February as US interest rates continue to be forecasted higher. Strong US Retail sales broke down option barriers at 107.85 and 108 but reported strong barriers at 108.10 and 108.30 are expected to provide stiff resistance along with exporters taking advantage of the higher levels. Overall the USDJPY traded with a low of 106.91 and a high of 108.08 before closing the day around 107.91 in the New York session.

The Sterling (GBP) traded to its lowest level since May 15th with the Dollar dictating direction. The Bank of England Bulletin showed public expectations of future inflation running way above current projections and action may be needed by the BoE. Overall the GBP/USD traded with a low of 1.9435 and a high of 1.9644 before closing the day at 1.9473 in the New York session.

The Australian Dollar (AUD) was sold heavily after May Unemployment Data came in very weak. Unemployment Change -19.7K vs. 13.5K expected and Unemployment Rate jumped to 4.3% vs. 4.2% forecast. The data resulted in trimming of interest rate expectations and growth expectations. In the US session the large drop in gold took the glimmer off the recent surging Aussie. Overall the AUD/USD traded with a low of .9329 and a high .9488 before closing the day at .9343. Looking Ahead, RBA Stevens speaks today on the state of the economy.

Gold (XAU) fell steeply through supports as US data came in strong and the USD surged. Overall trading with a low of $857 and high of $882 ending the New York session at $868 an ounce.

Technical Commentary

• Euro - 1.5455

  Initial support at 1.5380 (Jun 12 low) followed by 1.5366 (Jun 5 low). Initial resistance is now located 1.5587 (Jun 12 High) at followed by 1.5657 (Jun 10 high).

• Yen - 107.75

  Initial support is located at 106.8 (June 12 low) followed by 106.24 (Jun 10 low). Initial resistance is now at 108.08 (Jun 11 high) followed by 108.61 (Feb 14 high).

• Pound - 1.9485

  Initial support at 1.9435 (Jun 12 low) followed by 1.9363 (May 14 low). Initial resistance is now at 1.9645 (Jun 12 high) followed by1.9683 (61.8% retracement of the 1.9801 to 1.9493 decline)

• Australian Dollar - 0.9380

  Initial support at 0.9304 (50% retracement of the .8953 to 0.9655 advance) followed by 0.9291 (May 15 low). Initial resistance is now at 0.9527 (Jun 10 high) followed by 0.9648 (Jun 9 high).

• Gold - 872

  Initial support at 857.65 (Jun 12 low) followed by 850 (Psychological Number). Initial resistance is now at 883 (June 11 high) followed by 895 (Jun 10 high).

The falling dollar continues to raise eyebrows in the world financial market and now even more than that. Members of the G7 industrialized nations are now seriously warning against strong foreign exchange transactions. They believe this could create more financial instability.

This weeks’ financial data in regards to the dollar do not look good, in fact it appears that the U.S. is falling into a recession, and the dollar continues to fall against the Japanese yen and the euro.

The falling dollar, has also created other problems in the market such as the rise in prices for commodities such as oil, wheat and other items, which means that consumers just don’t have the money to spend. This will cause banks to rethink their interest rates and possibly lower them, and will keep some countries from basing their economy on the U.S. dollar.

At this rate inflation will soon be both a humanitarian and political problem too. Rising food costs because of rising commodities will seriously affect the years of work in trying to reduce poverty worldwide. Consumers are now worrying about filling their gas tanks, but others are now worried about filling their stomachs.

For a long time the G7 industrialized nations have warned that a countries economy should be based on the countries economics and not on other currencies, such as the dollar, but now they are emphasizing the principle even more. In fact this is a probably the strongest concert the group of 7 has expressed since 2000.

For now the financial world is only on alert, and there is nothing being done as yet to back up the dollar.

Some financial experts believe that any recovery that the dollar makes will only be a short term one until investors believe that the U.S. economy is on the rise again. Others say that although there is sure to be bad financial news this week, the dollar should slowly come back. It is believed that the U.S. Federal Reserve Board has almost finished the interest rate cutting period, and the European Central Bank will probably reduce rates before the end years, and that things will probably not get worse for the U.S. economy. This means that the U.S. dollar should recover on its own without any intervention.

Paul O’Neill, a former Treasury Secretary for the U.S. recently suggested that the "strong dollar" policy that the U.S has in place since 1995 is not based on strong principles in fact O’Neill has stated that its "a vacuous notion."

This "strong dollar" policy suggests that the US has the capability of managing the value of the dollar and other currencies in the world. O’Neill was in office during 2001 and 2002 and tried to pursue the idea of a of a strong economy instead of pursuing the idea of a strong currency. Today’s Secretary of the Treasury has often repeated his support of the "strong dollar" policy.

O’Neill says ``When I was Secretary of the Treasury I was not supposed to say anything but `strong dollar, strong dollar.'' But in now he doesn’t believe in such a thing, and he didn’t really believe it back then either. In fact he now says, ``I argued then and would argue now that the idea of a strong dollar policy is a vacuous notion.''

In fact, the dollar recently fell again against the euro by 15% and O’Neill believes that the U.S. government has little to do with whether the dollar is strong or not, and it is really the markets that have more control over the rise and fall of the currency than the U.S. government does. "When people say STRONG DOLLAR, if they don't mean that `we believe intervention can work and we're prepared to intervene,' then `strong dollar' is ridiculous,'' said O’Neill.

The G-7 Reunion

In their April 11th meeting, the Group of Seven major nations’, finance chiefs, gave a serious warning as to the repercussions that could arise from the falling dollar. Soon after these concerns were voiced to the people, the Secretary of Treasury of the U.S. reiterated in a following press release, his "strong dollar" motto, but O’Neill says, he was asked to repeat the mantra as well, and that every Treasury secretary is asked to repeat the phrase, and has done so since the Clinton era, when the Motto was instigated. The Treasury secretary always follows the “strong dollar” policy, no matter what the real state of the dollar is.

The dollar recently reached an all time low of $1.5979 against the euro. It has also dropped by 14% against the Japanese yen in the last year, trading at 101.45 yen.

The falling dollar continues to raise eyebrows in the world financial market and now even more than that. Members of the 7 industrialized nations are now seriously warning against strong foreign exchange transactions. They believe this could create more financial instability.

This weeks financial data in regards to the dollar do not look good, in fact it appears that the U.S. is falling into a recession, and the dollar continues to fall against the Japanese yen and the euro.

The falling dollar, has also created other problems in the market such as the rise in prices for commodities such as oil, wheat and other items, which means that consumers just don’t have the money to spend. This will cause banks to rethink their interest rates and possibly lower them, and will keep some countries from basing their economy on the U.S. dollar.

At this rate inflation will soon be both a humanitarian and political problem too. Rising food costs because of rising commodities will seriously affect the years of work in trying to reduce poverty worldwide. Consumers are now worrying about filling their gas tanks, but others are now worried about filling their stomachs.

For a long time the 7 industrialized nations have warned that a countries economy should be based on the countries economics and not on other currencies, such as the dollar, but now they are emphasizing the principle even more. In fact this is a probably the strongest concert the group of 7 has expressed since 2000.

For now the financial world is only on alert, and there is nothing being done as yet to back up the dollar.

Some financial experts believe that any recovery that the dollar makes will only be a short term one until investors believe that the U.S. economy is on the rise again. Others say that although there is sure to be bad financial news this week, the dollar should slowly come back. It is believed that the U.S. Federal Reserve Board has almost finished the interest rate cutting period, and the European Central Bank will probably reduce rates before the end years, and that things will probably not get worse for the U.S. economy. This means that the U.S. dollar should recover on its own without any intervention.

The US Dollar has fallen to its lowest level in three years against the Japanese Yen in forex. It also has hit its weakest point ever against the Euro during forex trading. This comes amid the release of US jobless claims data, revealing a large rise in claims. This has shown that the US economy barely grew in the final quarter of 2007. Recession fears alongside the rising speculation of a large rate cut on the 18th of March is causing the US Dollar to fall at record lows. On the positive side, the falling US Dollar is making US goods cheaper overseas, raising exports and reducing its trade deficit for the first time since 2001. The National Association of Purchasing Management Chicago revealed today that its business barometer had fallen to 44.5 in February which is its lowest level since 2001. This has raised speculation of the likelihood of a 75 basis point Fed-rate cut to 2.25 on the 18th of March.

''It's broad dollar weakness because of concerns about the U.S. economy, U.S. yields, expectations of rate cuts and financial markets,'' said Tom Fitzpatrick, global head of currency strategy at Citigroup Inc. in New York.

''They don't care about the weak dollar. I absolutely believe the market is disappointed'' by Bernanke's comment.

In forex trading the US Dollar fell to a three year low against the Japanese Yen, falling to 103.69 Japanese Yen before settling on 103.74 Yen. The US Dollar fell at an all time low against the Euro, trading at $1.5239 per Euro, the weakest since the euro's inception in 1999. The Euro has gained 2.1 percent against the falling US Dollar for this month.

The US Dollar has fallen to a three week low against the Euro on speculation that the US Federal Reserve will continue to cut its interest rates in an attempt to avoid a recession while the European Central Bank (ECB) keep their interest rates steady. The Euro rose against the US Dollar after a government report revealed that the European service industries went beyond the expected forecast in February.

''The U.S. is in a material slowdown and it feels like a recession,'' said Camilla Sutton, co-head of currency strategy at Scotia Capital Inc. in Toronto.

Futures on the Chicago Board of Trade reveal traders see a 96 percent chance of a half a percentage point cut on the target rate on the 18th of March. In contrast, traders have increased bets of an interest rate hike by the Reserve Bank of Australia (RBA) by a quarter of a percent to 7.25 percent when they meet in March. New Zealand's borrowing rate is also at a record level of 8.25 percent. The US Federal Reserve has lowered its interest rates a total of 2.25 percent to 3 percent since the 18th of September last year.

In forex trading, the US Dollar has fallen to $1.4827 per Euro, from $1.4814 yesterday, and dropped to the weakest since the first of February. The US currency touched an all-time low of $1.4967 per Euro on the 23rd of November. The US Dollar fell to 107.17 Japanese Yen from 107.40 Yen. The US dollar posted a second straight weekly loss against the Euro, falling 1 percent.

The US Dollar has fallen on the Friday trade after the release of weak economic data and the generally negative comments made by US Federal Reserve chairman, Ben Bernanke, the day before. The US Dollar fell as a closely observed consumer sentiment index fell to its lowest in 16 years. The US Dollar commenced the day on a weak note, due to Ben Bernanke's assessment of the US economy on Thursday. Bernanke told a Senate committee there were strong ''downside risks'' to US economic growth and that the Fed was ready to respond as necessary, a small hint that further interest rate cuts might happen in the near future.

''With house prices plummeting, employment falling, stock markets in turmoil and gasoline prices still above US$3 a gallon, it is little wonder consumers are unhappy,'' said Paul Ashworth, US economist at Capital Economics.

''But the extent of the decline this month suggests that a degree of panic has now set in -- this is bad, very bad,'' he said.

In forex trading, the US Dollar fell against the major currencies. Against the British Pound, it was at US$1.9612 from US$1.9682. The Euro traded at US$1.4683 at 10pm GMT after US$1.4637 late on Thursday in New York. The US Dollar traded at 107.72 Japanese Yen, down from 107.85 Yen on Thursday.

The US Dollar fell in forex trading against the major currencies, increasing last night's losses due to speculation that the interest rate differential between the falling US Dollar and other currencies could widen further in the near future. ''Currencies are still rallying when there is a hawkish shift in central bank expectations,'' said John Noonan, an analyst at Thomson IFR. Speculation of another interest rate cut by the US Federal Reserve as early as this month in order to stimulate the stagnant growth in the world's largest economy. Forex traders are currently waiting on the release of economic reports in the Euro zone for more clues on future interest rate rises. Britain's consumer price index is to be released later today while its quarterly inflation report will be released on Wednesday.

In forex trading, the US Dollar fell, trading at 1.4518 per Euro compared to a previous trade of 1.4515 US Dollar per Euro. The British Pound was worth 1.9501 US Dollars compared with 1.9496 US Dollars overnight. Against the Japanese Yen, the US dollar was down at 106.86 Yen from 106.88 Yen as investors continued to unwind their carry trades funded from Japan.

The US Dollar is at a 2-month low against the major currencies after the US Federal Reserve cut interest rates by half a percentage point. The rate cut comes just 8 days after the US Federal Reserve unexpectedly cut rates by three quarters of a percentage point in order to support its deteriorating economy. ''The language in the Fed's statement was fairly strong, suggesting the Fed is still worried with the possibility of further deterioration in the U.S. economy,'' said Mark Meadows, analyst at Tempus Consulting in Washington, D.C. Dealers in the New York Board of Trade's US Dollar index reacted by pulling the US Dollar at a 2-month low. Analysts are worried about the inflationary impact of the Fed's aggresive rate cut. Despite that, they have said that Federal Reserve's main focus is to keep the US economy out of a recession.

In forex trading, the US Dollar hit a 2-month low against a basket of currencies. It hit resistance against the Euro, falling by 0.8 percent to trade at $1.4906. The Pound Sterling traded higher by more than a cent and last traded up 0.1 percent at 1.9914. The dollar also fell 0.6 percent against the Japanese Yen to trade at 106.40 Yen and hit a record low of 1.0824 Swiss Francs. It also fell against the Australian Dollar, trading at 89.95 US cents compared with yesterday's trade of 89.77 US cents.